India represents an interesting case of a country which, despite its size and its immense potential as a tourist destination, has seen relatively low levels of international tourist arrivals and receipts. In fact, growth in international arrivals and receipts in the country during the past decade has not kept pace with the global rates of increase. Two sets of interrelated factors have been found to be largely responsible for this poor performance of India's tourism sector. The first sector is the low prioritization of tourism in the hierarchy of development directions identified by the Government. As a consequence, key areas such as tourism infrastructure development, marketing and promotion, and manpower development have lagged behind the industry's requirements. The second factor relates to India's aviation policy, which has led to the lack of adequate and high quality air transport services into India. The paper will show how these factors have retarded the growth of the tourism industry in India and will offer some insights on how these problems could be addressed by the Government.